Dear Honourable Prime Minister, 

In ‘Doing Business Report 2014’ by the World Bank and the International Finance Corporation, India was ranked at 134 amongst 183 countries whereas India was placed at 132 in 2013 Report. In 2014 report, India was positioned at 179 for ‘Starting a Business’ among 189 Countries whereas we were placed at 177 in 2013 Report. 

In 2011, MCA had initiated many welcome changes to make the process of doing business easy.  These initiatives were either withdrawn or diluted in the last quarter of 2011. Much awaited proposal for ‘Online incorporation of companies within 24 hours’ was withdrawn by MCA stating that the registration of Companies are happening across India within 48 Hours. 

Companies Act 2013 and Rules made for ‘Starting a Business’

After deliberations for more than two decades, Companies Act, 1956 has been replaced by Companies Act 2013 

The amendment to the Companies Act, which the industry and Ministry deliberated for more than 23 years, has been implemented in less than 60 days.  We are afraid that the Ministry of Corporate Affairs were in a hurry to implement the Act when the country was undergoing the democratic process of General Elections. The Rules were drafted in a hasty manner to bring back many of the draconian bureaucratic process that was wisely excluded from the New Act. 

Corporate India was expecting the Rules to enable ease of business start-ups and to cut down on the procedural hassles, as was promised. However, the notified Rules came as a shock to the business world, and destroyed their hopes of competing with high standards of efficiency in global business. 

As on today, entrepreneurs who wish to start the business will certainly think twice before formation of Companies considering the hurdles they have to overcome to register a business and the difficult path ahead for compliance. 

We, Bangalore Company Secretaries Association, here by point out few lapses under the new Act and Rules and practical difficulties faced by Entrepreneurs, Industry, Professionals and the Country as  a whole  for ‘Starting a Business’ under Companies Act 2013. 

A detailed submission is forwarded to your Office and an online petition is initiated by Bangalore Company Secretaries Association (BCSA) at www.change.org for additional suggestions and inputs by stakeholders.

We also wish to submit our suggestions for simplifying the process of ‘Starting and Doing Business in India’ and to make India’s ranking below 10 in the coming ‘World Bank’s Doing Business 2015 Report’:

1. Overhaul the Companies Act, 2013 and reframe the Rules to make it modern, robust, entrepreneur friendly, compliance oriented law and process at par with International standards with ease of start-up, doing business and closure.

2.  Implement ‘Incorporation of Companies in 24 Hours’ and digitalisation of incorporation documentation as was proposed by erstwhile Secretary of MCA Mr. DK Mittal.

3. Centralisation of Company Registration: To make the Corporate Registration across India under uniform process and to have a uniform interpretation of Company Name Guidelines and to avoid varied procedural requirements by different ROC Offices, it is the high time to centralise the Corporate Registration process away from Office of Registrar of Companies of each State.

4. Single window Clearance mechanism linked to MCA for all start-up related registrations such as Permanent Account Number (PAN) from Income Tax Authorities, Service Tax Registrations, Export Import Code for Companies and LLPs which inter-alia simplifies the procedural diarchy and at the same time enhances effective governance.

5. Revamp the State government’s process of start-up allied registrations such as Shops and Establishment Acts, Value Added Tax Registrations, Labour Law Registrations and implement a Single application / Single Window Clearance mechanism.

We request your honourable office to intervene and do needful.

Thanking you,

Yours faithfully,

For Bangalore Company Secretaries Association,

CS S.N Mishra

President  

Copy of the Representation:

BCSA Representation to the Prime Minister of India on Companies Act 2013